M/S HEMDEV REALITY PVT LTD.,MUMBAI vs. ACIT WARD 12 (2)(2), MUMBAI

The Ld. AR, drawing attention to paper book, submitted that Ld. AO made impugned addition without any basis. The purchases were backed by purchase invoices and the payments were through banking channels. The supporting documents in the shape of purchase invoices, purchase register, ledger extracts, sales register, bank statement etc. has been placed before us. In the alternative, Ld. AR pleaded to restrict the additions to some reasonable extent as done in numerous orders of various benches of the Tribunal under similar circumstances. The Ld. DR, on the other hand, drew attention to the fact that these documents were not placed before lower authorities and the impugned order is an ex-parte order.

We have carefully heard the rival submissions and gone through the documents placed before us. Our adjudication to the subject matter of appeal would be as given in succeeding paragraphs.

The material facts are that the assessee being resident corporate assessee stated to be engaged in construction and trading of diamonds was assessed for the year under consideration on best-judgment basis u/s 144 r.w.s. 147 of the Act. The original assessment was framed u/s 143(3). However, the case was reopened pursuant to receipt of certain information from DG (Investigation) that the assessee procured bogus purchase bills aggregating to Rs.33.31 Lacs from two tainted parties belonging to Shri Rajendra Jain group as detailed in the assessment order. Notices issued u/s 133(6) to confirm the transactions did not elicit any satisfactory response. In the absence of any satisfactory response forthcoming from assessee to establish the genuineness of the purchases, these were added back to assessee’s income.

Though the assessee preferred further appeal before Ld. CIT(A), however, it failed to defend the purchases so made which resulted into confirmation of action of Ld. AO. Aggrieved, the assessee is in further appeal before us.

Upon due consideration, we find that there could be no sale without actual purchase of material. The goods procured by the assessee from these two dealers has subsequently been exported as could be borne out of the documents placed before us. The assessee was in possession of purchase invoices and the payments to suppliers were through banking channels. At the same time, the assessee failed to discharge the primary onus of proving the genuineness of the purchases. Therefore, it is a fit case to estimate the additions on such purchases. To put an end to litigation, we estimate the additions against tainted purchases @10%. Accordingly, the impugned additions stands restricted to Rs.3,33,195/- whereas the balance addition stand deleted. No other effective points have been urged before us.

The appeal stand partly allowed to the extent indicated in the order. Order pronounced in the open court on 04th March, 2021. (Mahavir Singh) (Manoj Kumar Aggarwal) उपा"" / Vice President लेखा सद" / Accountant Member मुंबई Mumbai; िदनांक Dated : 04/03/2021 Sr.PS, Jaisy Varghese आदेशकी"ितिलिपअ"ेिषत/Copy of the Order forwarded to : अपीलाथ"/ The Appellant 1. ""थ"/ The Respondent 2. आयकरआयु"(अपील) / The CIT(A) 3. आयकरआयु"/ CIT– concerned 4. िवभागीय"ितिनिध, आयकरअपीलीयअिधकरण, मुंबई/ DR, ITAT, Mumbai 5. गाड"फाईल / Guard File 6. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.